News From Air Cargo Industry
Luxembourg Specializes in Logistics
Regional competitors in France, Belgium, the Netherlands, and even Germany should fasten their seatbelts. The Grand Duchy is on its way to becoming a major European center for logistics services.
Luxembourg - a recognized center for finances, known for its political stability and the prosperity of most of its 530,000 inhabitants, combined with high international reputation. These have been the small European country’s assets in the past and still are valid today.

But following the rule that standstill is setback local entrepreneurs together with state authorities have put the logistics topic on the state’s national development agenda. Accordingly, a cluster for logistics was initiated back in 2009 and has reached some remarkable results since then. “The cluster is meanwhile actively supported by more than one hundred firms, among them big names such as DHL, Panalpina, the ING Bank, Cargolux and others and is well recognized as Luxembourg’s main representative of logistics,” emphasized Pierre Gramegna, Cargolux’s former Chairman and today’s Director-General of Grand Duchy’s Chamber of Commerce in his welcome speech of the cluster’s recent business forum in Luxembourg City.

The achievements made in the past are only first step which need to be pushed fur-ther ahead  to safeguard Luxembourg’s role as major center for logistics services. “We ought to do more and become even better,” exclaimed the logistics cluster’s manager Alain Krecké in his keynote to the 200 participants of the meeting. “Costs are rising, rates decreasing, and results of enterprises are shrinking,” warned Alain firms and also some municipal institutions that are just sitting back waiting for some light to appear on the horizon.

It was kind of a wakeup call, since Luxembourg’s transport and logistics sectors need to change, he demanded. Enterprises should increasingly concentrate on offering tailored added value services within niche markets for highly specialized goods, recommended Krecké. Complex supply chains call for added value logistics services that can best be provided by specialists that concentrate their operational activities in logistics parks. Concentration of resources fosters the local cooperation of firms and promotes a useful division of labor. “These services are mainly related to activities such as labeling, palletizing, final packaging or online order picking.” The recently inaugurated center for pharmaceutical and healthcare products within Luxair Cargo’s warehouse at Findel airport and the adjacent located Luxembourg Freeport where arts and high valued items can be stored and traded when construction is finished next year perfectly illustrate this policy, said Alain.

With the ongoing globalization of production and trade, the rise of containerized shipments, and the benchmarking of logistics sites in terms of efficiency and costs the question arises, which place fits best as multimodal gateway for international and pan-European supply chains and offers state-of-the-art logistics infrastructure.  

Alain’s answer to this, no wonder, was the Grand Duchy. With Luxembourg airport and the Bettembourg Eurohub project the country offers clients two logistics hubs of top quality.
Luxembourg is located at two historical crossroads: the corridor from Scandinavia via Germany and France to the Iberian Peninsula and the Benelux to Great Britain, Switzerland and Italy stretching routes. This favorable geographical position is a valuable asset which must be secured and improved by smart economic as well as political decisions. Taking into consideration the high costs of wages and real estate in Luxembourg and considering the fact that most goods are not made in Luxembourg but consist of transits, “we should focus on specialized products requiring a high level of added value services.” Krecké went on saying: “Customers requiring sophisticated and highly complex logistics services will have a lower inclination to change location compared to those that transport and store standard products.”

Words that are confirmed by the increasing attractiveness of Luxembourg as gateway and transit point for pharmaceuticals, chemical products, foodstuff, textiles, electronics or machinery parts. This is acknowledged also by Germany’s by far largest logistics association BVL (Bundesvereinigung Logistik) by establishing its new ‘Chapter Luxembourg’ within the framework of the Grand Duchy’s Logistics Business Forum last week. The chapter is headed by Alain Krecké and Supply Chain Manager Thomas Mayer of Luxembourg-based IEE International Electronics & Engineering S.A.
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